CEO Stories: How Attitudes about COVID-19 Are Changing in the Middle Market

Leaders shared their thoughts on such issues as how the pandemic is affecting their businesses day-to-day, its long-term implications for their businesses, and how well-positioned they are to be resilient. Stewart also spoke about changes in attitudes from the first survey, in March, to the second, in June.

MARCH vs. JUNE

In March, 25 percent of companies believed the impact of COVID could be “catastrophic” in the next three months. In June, that number had dropped just about in half. Sentiment about uncertainty changed much less. In the first survey, three-quarters of respondents said the single biggest issue for them was uncertainty. In June, two-thirds of respondents still labeled it their top concern. And by June, their No. 2 and No. 3 concerns were employees and customers.

FINANCIAL AID

More than half of respondents in the June survey said that they had gotten some kind of financial help; the No. 1 source was the Small Business Administration’s Paycheck Protection Program. As most middle market companies are not public, they don’t have access to the capital markets. Other sources of money were drawing on an existing bank line of credit, getting a new bank loan, getting private equity investment, or getting an SBA loan, with most businesses getting money from more than one source.

GOING FORWARD

Deal making got put on hold, but more companies are thinking they will make significant changes in the next 12 months. Possibilities include restructuring, a change in leadership, or both. With private equity sitting on more than a trillion dollars, deal making isn’t likely to stay stagnant long term.